Debt Collection: Regulation

Justice written question – answered on 26th March 2012.

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Photo of Andrew Slaughter Andrew Slaughter Shadow Minister (Justice)

To ask the Secretary of State for Justice whether his Department is taking steps to address the concerns raised by the Financial Ombudsman Service on the risk to consumers of a double disadvantage when using claims management companies.

Photo of Jonathan Djanogly Jonathan Djanogly The Parliamentary Under-Secretary of State for Justice

Consumers considering using the services of claims management companies (“CMCs”) should be in a position to make an informed choice about whether the service they are being offered is suitable for them and provided on appropriate terms. CMCs are required to give consumers clear, honest, comprehensive and objective information about the options available for pursing their claims, and the associated costs and risks involved. The Claims Management Regulation Unit will investigate and take enforcement action as appropriate against any CMCs that adopt poor business practices, particularly those which take advantage of consumers. Enforcement action taken can range from warnings, restrictions on CMC licences, suspension or cancellation of licences.

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